Oberlin College has lost all hope of avoiding its huge judgment in the Gibson’s Bakery case. The liberal arts college, found by a jury to have defamed the bakery as racist, has been forced to face up to reality and post a $36 million bond.
The bond — a promise the College can pay back Gibson’s bakery — comes after Oberlin’s lawyers tried for weeks to avoid paying up or posting bond until the period of appeal had passed. The bond makes certain Gibson’s Bakery will receive their damages, even if Oberlin goes bankrupt.
A jury found Oberlin College committed libel, slander, and interference with business relationships by supporting false allegations of racism against Gibson’s, agreeing that the school had aided student protests and helped sever business ties with the bakery. (RELATED: Oberlin Social Justice Racism Hoax Costs The College $11.2 Million)
In a time when 98 percent of the top 200 universities, according to US News and World Report, have administrators dedicated to “diversity, equity, and inclusion,” the huge judgment will make colleges wary of involving themselves with social justice causes. The Gibson’s Bakery case says: if you go too far, you might have to pay up.
Lorain County Common Pleas Judge John Miraldi ordered Oberlin, which is struggling financially, to post bond on July 26, and Zurich American Insurance Company posted the bond on behalf of Oberlin July 30, according to the Chronicle. The bond was in the amount of $36,367,711.56. The agreement says Oberlin and its Dean of Students “are held and firmly bound, jointly and severally” to pay the bond amount to the Gibson’s, and the bond amount is “well and truly to be paid.”
The lawsuit stemmed from an incident in November 2016 in which a black Oberlin student attempted to steal two bottles of wine from Gibson’s and purchase one bottle of wine with a fake ID in November 2016. After the white Gibson’s cashier told the student he was contacting the police, the student struck the employee’s face in an effort to stop a picture of him from being taken.
The cashier chased the student when he ran out of the store with the stolen wine and tackled him. Two of the student’s friends then joined in, and were all punching and kicking the employee, who was lying on the ground, when the police arrived. Student protests then rose up against the bakery for what they perceived as racial profiling. The three students have since confessed guilt for their crimes in court.
Oberlin suspended their purchasing agreement with the bakery for two months following the protests. Dean of Students Meredith Raimondo attended the protests in her capacity as a college official, and allegedly handed out a flyer that told students to boycott Gibson’s and said, “This is a RACIST establishment with a LONG ACCOUNT of RACIAL PROFILING and DISCRIMINATION,” according to the Washington Examiner.
Oberlin also blamed the bakery for the protests, saying, “Gibson bakery’s archaic chase-and-detain policy regarding suspected shoplifters was the catalyst for the protests,” according to the New York Times. (RELATED: Lawsuits, Protests, And Cries Of Racism At Oberlin After Black Students Arrested For Stealing, Assaulting White Shopkeeper)
The Oberlin case is not the only example of race obsession at colleges and universities. The National Council of Teachers of Mathematics recently pushed back against racism in math, arguing professors should expand to non-white math leaders. Williams College held “Processing Whiteness” sessions back in February. A “Dismantle Whiteness” mural was installed at the University of Southern California in 2018.
Republican lawmakers in South Dakota are now pushing back against these social justice efforts. In June, they penned a letter to the South Dakota Board of Regents, questioning whether diversity bureaucracies promote left-wing ideology and suggesting diversity and inclusion offices should be dismantled, according to the Argus Leader. The South Dakota lawmakers believe they are used to “promote social justice causes associated with the political left,” such as safe zone trainings, drag shows, and social justice trainings. The lawmakers wrote these diversity bureaucracies “should be dismantled.”
Oberlin has an expansive diversity office, which involves five employees, and liaised closely with the activist student body. Dean of Students Meredith Raimondo, found by the jury to have libeled Gibson’s as racist, served as special assistant to the president for equity, inclusion, and diversity as part of the Oberlin Office of Diversity, Equity, and Inclusion prior to being appointed dean of students. She has been a social justice advocate for much of her life, and has taught classes on gender and sexuality, race and ethnicity studies, social justice, and HIV/AIDS.
In the aftermath of the protests, a former administrator at Oberlin said the protests could result from the lack of controversies for a social justice warrior at the diverse and welcoming college. “A freshman from an East Coast big city might come to Oberlin and find there is little for a social justice warrior to do in a small town like this, so they get frustrated and make issues like this shoplifting thing bigger than it should be, and the school follows along,” said the administrator, according to the Weekly Standard.
If Oberlin had failed to post bond, the “worst case scenario” could have been quite dramatic, according to Cornell University law professor William A. Jacobson. “ If Oberlin College had failed to post the bond, the Gibson’s could have utilized whatever collection methods are available in Ohio,” to receive their payment, which include “court-ordered seizing of bank accounts and tangible assets,” Jacobson said.
If Oberlin had failed to post bond, it would have been possible for Gibson’s to seize property from the College, like buildings on campus or land. However, Professor Jacobson, who has been following the case closely since its inception, told the Daily Caller “It’s unlikely that title to building would have been turned over to the Gibsons.” Jacobson said, “More likely, the Gibson’s would have sought financial assets, which are much easier to value and to turn over.”
Oberlin testified in court they have $50 million in liquid financial assets. Gibson’s would likely have taken money from these assets if Oberlin had failed to post bond. Oberlin also has an endowment of $884 million, but most of this is restricted, according to Jacobson.
The bond is made much worse for Oberlin College by the fact that it faces a terrifying financial situation which shows no signs of improving anytime soon.
“It’s getting harder to boost revenues,” the College’s Board of Trustees said in a letter in January 2018. “We got here by failing to acknowledge how the world has changed … The math doesn’t work anymore,” the College said.
In 2018, the College reported a deficit of $4.7 million. Oberlin only achieved this deficit after slashing retirement benefits in the amount of $5 million. (RELATED: SHOCKER: Absurdly Expensive College Faces $5 MILLION Budget Crisis After Radical Loons Run Wild)
In an effort to boost revenue, the College announced in April it will be enrolling 100 fewer students in its music conservatory, and 100 more in its liberal arts program. Music conservatory students typically require more financial assistance and scholarships than liberal arts students, and are therefore less lucrative.
“The peril isn’t insolvency and collapse, we can always spend down the endowment to survive for decades,” Oberlin College said of its financial woes. Currently, about one out of every four dollars Oberlin spends comes directly from its endowment.
“The peril we face is mediocrity and irrelevance, which is what will come if our decisions are increasingly driven by short-term financial exigencies,” the Oberlin Board of Trustees said. The school was ranked 23rd in the US News and World Report rankings in 2016, but their ranking has now dropped to 30.
Because of the financial crunch Oberlin faces, the judgment in the Gibson’s Bakery case could significantly change how Oberlin spends their money.
Jacobson told the Daily Caller it is “doubtful” the judgment itself will cause “serious long-term financial harm” to Oberlin. However, there could be serious realignment of Oberlin College’s spending as a result of the lawsuit because it is “combined with a general negative financial outlook for the college prior to the verdict resulting from reduced enrollment,” Jacobson said.
It is likely Oberlin will appeal the judgment, according to Jacobson. At the same time, Gibson’s will likely cross-appeal on account of the $44 million verdict being reduced by the judge to $25 million because of tort caps.
A settlement would also make sense, as both parties face risks from appeal. Jacobson cast doubt on whether a settlement could happen as a result of the animosity between Oberlin and Gibson’s. “Given the emotions, I’m not sure how much either side is willing to compromise at this point,” Jacobson said.